There was a time when I worked for a large Indiana-based broadcasting company that was traded on the NYSE. This was my first experience of being in a management position for publicly traded company, and it was quite an education. I learned very quickly that it was not what I thought that mattered but what Wall Street thought. Decisions were based on what impact they would have on the stock price.

I have learned since then that this is a common practice in many publicly traded corporations. It also explains why there is comparatively little Wall Street investment in production agriculture. Because when it comes to farming, Wall Street just doesn’t get it.

A perfect example of this is an article in the July 11 issue of Time magazine titled Want to make more money than a banker? Become A farmer! The story portrayed grain farming as a cash cow and agriculture as a booming industry worth investing in.

It began by quoting Jim Rogers, who Time describes as an “investment whiz and one of Wall Street’s towering personalities,” who says “Become a farmer, food prices have been high recently.” This implies that Rogers believes that high food prices mean big profits for farmers. Even a cursory review of the facts would have shown Rogers that food prices bear little relationship to what actually goes back to the farm.

He goes on to say that what we need is not more bankers but more farmers, “The world has a serious food problem and the only way to solve it is to get draw more people back into agriculture.”

While I agree that the world has a food problem, and that a few less bankers would be a good thing, I am profoundly mystified how “drawing more people into agriculture” is going to solve anything.

The image of hundreds of Wall Street investors shedding their 3-piece suits, donning overalls and marching off the country, in their Gucci loafers, to cash in on the boom times in agriculture is laughable and could be the basis of a remake of the old television sitcom Green Acres.

The article’s author, Stephen Gandel, only talked to two people with real ties to agriculture: Chuck Fluharty, a former director of the Indiana Beef Cattle Assoc. and now with the Rural Policy Research Institute at the University of Missouri, and Ken Woitaszewski, a grain farmer in Grand Island, Neb.
Both men paint an accurate picture of how increasing world food and fuel demand will keep the U.S. ag economy strong and how this is pumping new economic life into rural America. But the article gives the reader the mistaken impression that farmers are getting rich.

Printed in large bold type is the figure that net farm income growth is forecast to be up 20 percent in 2011.

The author talks about how grain prices have doubled, but misses the fact that sharp spikes of fertilizer, seed and land prices have dramatically increased the price of producing a bushel of corn. The author totally ignores the livestock and dairy sectors, which have suffered some difficult economic times.
The story also calls farming an industry with “lax regulations,” a statement that is laughable in light of the mountains of local, state and federal regulations farmers deal with every day.

The focus of the piece is on the potential profits that can be made from farming, but it does not mention the enormous risks involved. This is ironic since Wall Street is all about avoiding risk.
Even the most aggressive junk bon
d broker or high risk mortgage banker would quake in abject fear at the kind of risk a farmer takes each spring when he puts millions of dollars into the dirt with little or no assurance that anything will happen.

If the New York tycoons want to cash in on the ag economy, they should stay out of our fields and invest their billions in firms that are providing the technological innovation that will increase food and renewable energy production. They should also stop investing in firms that are chewing up productive farmland to build housing developments, big box stores, and strip malls.

While it is nice to see that the wisdom of Wall Street is now beginning to appreciate the importance of agriculture, they also need to learn this is not a “get rich quick” business, but rather a dangerous and high risk business with no quarterly dividends, golden parachutes, or stock options; but, arguably, one of the most important businesses in the world.

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Gary Truitt may write to him in care of this publication.